Russia's main marketplace for trading stocks has been suspended by the World Federation of Exchanges (WFE), one of the main global trade associations, because of Russia's invasion of Ukraine.
The Moscow Exchange, which also runs the markets for bonds and currencies, has been removed by the WFE's board. "This decision, which is consistent with the global response to this matter, was not taken lightly," the WFE told Newsweek in a statement on Friday.
The WFE's move follows a series of major economic actions taken by the U.S. and other countries against Russia. After President Vladimir Putin ordered the assault on Ukraine, nations started issuing severe sanctions against his country, and Western companies began to halt their business in Russia. These moves have drastically hurt the nation's economy and affected everyday Russians' way of life.
The WFE is a global industry group for exchanges and clearinghouses around the world, with Europe making up 43 percent of its membership. The WFE said Russia was suspended, not expelled, from the industry, and that decision will be reviewed in line with the WFE's governance.
"This week, the WFE Board called an extraordinary meeting to discuss the situation in Ukraine, the implications for the WFE, our industry and the global response," the WFE's statement said. "The Board took the decision to suspend Russian members and affiliates."
On Wednesday, Europe's industry body for securities and derivatives exchanges announced that its board had voted unanimously to exclude the Moscow Exchange in response to Russia's military action against Ukraine.
"The Federation of European Securities Exchanges utterly condemns the Russian-led invasion of Ukraine. Our thoughts and unwavering support go out to the Ukrainian people," the FESE said in a statement.
"In light of the Russian government's actions, the FESE Board has recommended that the General Assembly vote to exclude the Moscow Exchange from the association, stripping it of FESE observer member status," the statement added.
On Thursday, Russia's central bank kept the Moscow Exchange closed for the fourth day in a row. The bank said it will make an announcement about future operations later on Friday, Reuters reported.
Besides creating havoc for the Russian economy, the international sanctions have caused the value of its currency to plummet. The value of the U.S. dollar is now equivalent to 104 Russian rubles. One day before Russia's invasion of Ukraine, $1 was equivalent to 83 rubles.
In all, the ruble has decreased nearly 30 percent in value. Russian banks have increased interest rates to more than 20 percent, and people have been flocking to ATMs to withdraw money, resulting in long lines and machines running out of currency. In just two days, Russian businesses and people withdrew 111.3 billion rubles from their bank accounts, the equivalent of $1.3 billion.
Update 03/04/22, 11:18 a.m. ET: This story was updated with a statement from the World Federation of Exchanges and more background.
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